Maryland Gov. Martin O’Malley is paying state employees $15,000-plus to resign by early January, as he looks for ways to plug the state’s $1.6 billion budget gap for the coming fiscal year. The state expects at least 500 employees to sign up for the severance packages, which will include a one-time payment of $15,000 and an additional $200 for every year of service. The payoff also includes three months of medical and dental benefits.
O’Malley signed the severance deal into law Tuesday, welcoming interested employees to apply for the program between now and Jan. 4. Only employees in the executive branch — which largely consists of state agencies such as the Department of Business and Economic Development — can apply, excluding agency heads. Those ineligible for the buyout include state police, judges and commission members.
“We all need to do more to cut costs in a fiscally responsible way,” O’Malley said, noting that the measure will help stave off layoffs.
Selected employees — those the state can afford to lose — will leave their jobs by Jan. 31 and cash in no later than March. The buyout bars them from rejoining state government for at least 18 months.
Maryland officials won’t discuss their expectations of how many employees will apply.
“We have some idea of the number, but we won’t say publicly,” said O’Malley spokesman Rick Abbruzzese. O’Malley must cut at least 500 executive branch jobs by June, as mandated in the fiscal 2011 budget.
Abbruzzese said the buyout “will allow us to do that and more.” Roughly 49,000 employees serve in the executive branch — making up more than 60 percent of state personnel.
Maryland partially modeled its employee buyout after Tennessee’s 2008 “voluntary buyout program,” which paid roughly 2,000 employees for their resignations.
The Tennessee program offered four months of base salary, a $500 check for every year of service, and six months of limited medical coverage. Employees older than 65 received an additional $2,400 check, and students were eligible for tuition assistance.
O’Malley dubbed his measure the “voluntary separation program.” He has not addressed whether the state will add the newly jobless to Maryland’s unemployment insurance payrolls.
The Department of Budget and Management has been charged with receiving and approving applications for the program. Applicants must also be approved by individual Cabinet and agency heads.
